KENYA – Kenyan maize milling sector has expressed fear that maize meal prices may further go up as Tanzania bans farmgate purchase of the rare commodity by foreigners, the Nation has reported.
The panic follows a statement published by the Tanzanian Ministry of Agriculture on May 23, requiring buyers from outside the country to source the produce through registered traders who bear tax identification numbers, certificate of tax compliance, and an export license.
Tanzania being a key supplier of the commodity to Kenyan millers the directive by the Tanzanian government has caused panic among maize millers who said that the move will affect the milling industry in Kenya since they source most of the commodity from Tanzania.
According to the Agro-processors Association of Kenya, the move by Tanzania comes at an inappropriate time when the country is grappling with a shortage of the necessary commodity.
Worse still, the move comes after the recent announcement by China that it is diversifying its corn source markets from the US to South Africa and Latin American countries such as Brazil, which are key buying destinations for Kenya’s imports.
Mr. Anthony Wambugu, Chairman of the millers’ association lamented the move, stating that the directive will lead to maize prices increasing in both countries, resulting in further hiking in maize meal (Unga) prices in Kenya.
“Remember we will be stable in maize supply from November when our farmers will be harvesting and for now, few traders have the permits,” Wambugu said, adding that traders have already flocked Tanzania and maize prices are going up daily.
In addition, the move spells doom for Kenya, which is relying on imports to address the runaway cost of flour that now stands at KES 6,100 (US$44.44) for a 90-kilogram bag amid import claims.
The country has been grappling with an acute shortage of staple commodities linked to prolonged drought and high fertilizer prices which impacted local production and drove prices to new highs as well as increased imports.
Data by Kenya National Bureau of Statistics (KNBS) in the recently released Economic Survey 2023 showed that Kenya has imported more than 520,000 tonnes of maize in the last two years, an increase of 190.2 percent.
However, with the ongoing rains and inputs subsidies, the country is hopeful that the maize crop will record better yields in 2023 and consequently shun the country from increasing imports amid the shrinking economy.